Published Sep 06, 2026 | 9:15 AM ⚊ Updated Sep 06, 2026 | 9:15 AM
Chief Minister Chandrababu Naidu, Deputy CM Pawan Kalyan and AP Finance Minister Payyavula Keshav ahead of budget presentation. (File Photo)
Synopsis: Just four months into the financial year, Andhra Pradesh has already run up a revenue deficit 68% higher than what it budgeted for the entire year. The numbers offer an early warning of the pressure on the state’s finances — and the challenge before the TDP-led government.
Andhra Pradesh’s cumulative revenue deficit touched 167.9% of the amount budgeted for the entire financial year within the first four months of FY 2026-27.
The data from the CAG’s State Finances Accounts at a Glance, through July 2026, point to significant early-year pressure on the state’s revenue account and continued reliance on borrowing to finance its fiscal requirements.
The report paints a worrying picture of Andhra Pradesh’s finances, marked by a sharp revenue deficit and substantial borrowing in the opening months of the financial year. The state has recorded the highest revenue deficit as well as the highest levels of borrowing among states.
The most alarming indicator is the revenue deficit.
Andhra Pradesh had already accumulated a revenue deficit of ₹36,942.36 crore by July, just four months into the 2026-27 financial year. This represents 167.9% of the full-year budget estimate of ₹22,002.50 crore.
An important caveat: monthly government receipts and expenditure can be unevenly distributed through a financial year, and the July figure should not be treated as a forecast of the eventual full-year deficit.
The deterioration is particularly significant when compared with the same period last year, when the revenue deficit stood at 110.71% of the annual estimate.
The figures highlight the challenge facing the TDP-led government in containing the gap between the state’s recurring revenues and expenditure.
The state’s fiscal deficit stood at ₹49,134.15 crore by July, equivalent to 64.7% of the annual budget estimate of ₹75,868.08 crore.
This compares with 60.5% during the corresponding period last year.
Table: Monthly net borrowing (in crore)
The state also recorded substantial net borrowing during the opening months of the financial year. Cumulative net borrowing crossed ₹49,134 crore by July, with June and July together accounting for more than half of the four-month total. The average monthly net borrowing was around ₹12,284 crore, with net borrowing peaking at ₹15,521 crore in July and touching a low of ₹9,762 crore in May.
The CAG figures present more than just a statistical snapshot. They point to a widening mismatch between the state’s revenue position and its expenditure commitments.
The fact that the cumulative revenue deficit has already exceeded the full-year budget estimate so early in the financial year should be a matter of concern.
A revenue deficit essentially means that the state is unable to meet its recurring expenditure entirely from its recurring revenues, increasing pressure on its finances and potentially limiting the resources available for development and capital investment.
The data also expose the gap between budgetary projections and actual fiscal performance.
For a state already carrying substantial financial pressures, continued reliance on borrowing to meet fiscal requirements could further drag it into financial deep waters.
Summing up the findings from the CAG report in a nutshell:
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